Fast pace of Canadian cannabis license approvals fails to avert supply shortage

Canadian regulators approved new cultivation space at a frantic pace in the months leading up to legalization, but not fast enough to avert the widely predicted shortage of legal cannabis.

In the month before the launch of Canada’s legal recreational cannabis market, facilities licensed by the federal government to cultivate marijuana had surpassed a cumulative 13 million square feet, according to data provided to Marijuana Business Daily by Health Canada.

That’s about 20% more than what was licensed in June and more than six times the space that was licensed in May 2017.

In that time, the number of licensed producers nearly tripled from fewer than 50 to 132.

Still, in the weeks after legalization, most provinces have seen significant shortages of cannabis products, including those for medical and recreational use.

Experts say the 13 million square feet is a small percentage of what ultimately will be needed to address demand of the two markets in the long run.

Deepak Anand, vice president of Toronto consultancy Cannabis Compliance, notes that the total does not take into consideration the hundreds of applicants that have been in the queue for years – some of which have large footprints.

As of August, 588 applicants were waiting in the LP pipeline, according to Health Canada.

“We are seeing a lot of interest from new applicants for standard and micro-cultivation and processing (licenses), which are all going to add to this pool,” Anand said.

“I think in a year we will see supply catch up to demand – pending Health Canada licensing of course.”

Matt Lamers can be reached at [email protected]

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One comment on “Fast pace of Canadian cannabis license approvals fails to avert supply shortage
  1. Maxcatski on

    It’s no surprise that demand has outstripped supply in this fledgling market.

    Given unlimited supply, the market will start to mature when supply catches up. Prices need to drop dramatically to capture black market share. Obviously there is a huge potential market in Canada and North America. Everybody loves cannabis!

    Reply

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